Bill Text: OR HB3548 | 2011 | Regular Session | Introduced
Bill Title: Relating to public employee retirement; declaring an emergency.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB3548 Detail]
Download: Oregon-2011-HB3548-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3642
House Bill 3548
Sponsored by Representative PARRISH; Representative JOHNSON,
Senator OLSEN
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Establishes retirement benefits payable under Oregon Public
Service Retirement Plan to persons who establish membership in
Public Employees Retirement System on or after effective date of
Act. Provides that such persons do not become members of pension
program of plan. Allows such persons to contribute up to 10
percent of salary to individual account program of plan. Requires
employer match of contributions up to maximum of 10 percent of
salary.
Provides break in service rules for persons who established
membership in system before effective date of Act.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to public employee retirement; creating new provisions;
amending ORS 238A.320, 238A.330, 238A.335, 238A.340, 238A.350,
238A.375, 238A.400, 238A.410, 243.800 and 341.551; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 and 3 of this 2011 Act are added to
and made a part of ORS chapter 238A. + }
SECTION 2. { + (1) Notwithstanding any other provision of this
chapter or ORS chapter 238, any person who is employed by a
participating public employer on or after the effective date of
this 2011 Act, and who has not established membership in the
Public Employees Retirement System before the effective date of
this 2011 Act, is entitled to receive only the benefits provided
under section 3 of this 2011 Act for periods of service with
participating public employers on and after the effective date of
this 2011 Act, and has no right or claim to any benefit under
this chapter except as specifically provided by section 3 of this
2011 Act.
(2) A person establishes membership in the system before the
effective date of this 2011 Act for the purposes of this section
if:
(a) The person is a member of the system, or a judge member of
the system, on the effective date of this 2011 Act; or
(b) The person performed any period of service for a
participating public employer before the effective date of this
2011 Act, that is credited to the six-month period of employment
required of an employee under ORS 238A.100 before an employee may
become a member of the system.
(3)(a) Any person who is an active member of the Public
Employees Retirement System on the effective date of this 2011
Act is entitled to receive the benefits provided by this chapter
and ORS chapter 238, as in effect immediately before the
effective date of this 2011 Act, for all service performed
before, on and after the effective date of this 2011 Act, unless
the person has a break in service on or after the effective date
of this 2011 Act. If the person has a break in service on or
after the effective date of this 2011 Act, the person is entitled
to receive the benefits provided by this chapter and ORS chapter
238, as in effect immediately before the effective date of this
2011 Act, for all creditable service performed before the break
in service, and the benefits provided under section 3 of this
2011 Act for periods of service with participating public
employers after the break in service.
(b) Except as provided in this subsection, a person has a break
in service for the purposes of this subsection if the person
performs no service with a participating public employer in a
qualifying position for a period of six consecutive months.
(c) If a person leaves employment with a participating public
employer for purposes that would qualify the person for family
leave under ORS 659A.150 to 659A.186, the person has a break in
service for the purposes of this subsection only if the person
performs no service with a participating public employer in a
qualifying position for a period of 12 consecutive months after
leaving employment with the participating public employer.
(d) If a person leaves employment with a participating public
employer for career development purposes pursuant to written
authorization of the participating public employer under a
written policy of the employer that applies generally to the
class of employees to which the member belongs, the person has a
break in service for the purposes of this subsection only if the
person performs no service with a participating public employer
in a qualifying position for a period of 12 consecutive months
after leaving employment with the participating public employer.
(e) A person does not have a break in service for the purposes
of this subsection by reason of any period of time during which
the person leaves employment with a participating public employer
for the purpose of serving as a member of the Legislative
Assembly during a legislative session.
(f) A person does not have a break in service for the purposes
of this subsection by reason of any period of time during which
the person is absent from employment with a participating public
employer and receives a disability retirement allowance under ORS
238.320.
(g) A person does not have a break in service for the purposes
of this subsection by reason of any period of time during which
the person leaves employment with a participating public employer
based on the seasonal nature of the person's employment as long
as the person returns to employment with the public employer
before the expiration of 12 full calendar months.
(4) The provisions of this section do not apply to a person
elected or appointed as a judge as defined in ORS 238.500. + }
SECTION 3. { + (1) A person who establishes membership in the
system on or after the effective date of this 2011 Act may not
become a member of the pension program of the Oregon Public
Service Retirement Plan described in ORS 238A.100 to 238A.245.
(2) A person who establishes membership in the system on or
after the effective date of this 2011 Act becomes a member of the
individual account program in the manner provided by this
chapter. + }
SECTION 4. ORS 238A.320 is amended to read:
238A.320. (1) A member of the individual account program
becomes vested in the employee account established for the member
under ORS 238A.350 (2) on the date the employee account is
established.
(2) A member who makes rollover contributions becomes vested in
the rollover account established for the member under ORS
238A.350 (4) on the date the rollover account is established.
(3) If an employer makes employer contributions for a member
under ORS 238A.340, the member becomes vested in the employer
account established under ORS 238A.350 (3) on the earliest of the
following dates:
(a) The date on which the member completes at least 600 hours
of service in each of five calendar years;
(b) The date on which an active member reaches the normal
retirement age for the member under ORS 238A.160;
(c) If the individual account program is terminated, the date
on which termination becomes effective, but only to the extent
the account is then funded;
(d) The date on which an active member becomes disabled, as
described in ORS 238A.155 (4); or
(e) The date on which an active member dies.
(4) If a member of the individual account program who is not
vested in the employer account performs fewer than 600 hours of
service in each of five consecutive calendar years, hours of
service performed before the first calendar year of the period of
five consecutive calendar years shall be disregarded for purposes
of determining whether the member is vested under subsection
(3)(a) of this section.
(5) Solely for purposes of determining whether a member is
vested under subsection (3)(a) of this section, hours of service
include creditable service, as defined in ORS 238.005, performed
by the person before the person became an eligible employee, as
long as the membership of the person under ORS chapter 238 has
not been terminated under the provisions of ORS 238.095 on the
date the person becomes an eligible employee.
{ + (6) The provisions of this section apply only to a member
who establishes membership in the system before the effective
date of this 2011 Act, as described in section 2 of this 2011
Act. + }
SECTION 5. { + Section 6 of this 2011 Act is added to and made
a part of ORS chapter 238A. + }
SECTION 6. { + (1) The provisions of this section apply to a
member who establishes membership in the system on or after the
effective date of this 2011 Act, as described in section 2 of
this 2011 Act.
(2) A member of the individual account program becomes vested
in the employee account established for the member under ORS
238A.350 (2) on the date the employee account is established.
(3) A member who makes rollover contributions becomes vested in
the rollover account established for the member under section ORS
238A.350 (4) on the date the rollover account is established.
(4) A member becomes vested in the employer account established
under ORS 238A.350 (3) on the date the employee account is
established. + }
SECTION 7. ORS 238A.330 is amended to read:
238A.330. (1) A member of the individual account program
{ + who established membership in the system before the
effective date of this 2011 Act, as described in section 2 of
this 2011 Act, + } must make employee contributions to the
individual account program of six percent of the member's salary.
(2) Employee contributions made by a member of the individual
account program under this section shall be credited by the board
to the employee account established for the member under ORS
238A.350 (2).
SECTION 8. { + Section 9 of this 2011 Act is added to and made
a part of ORS chapter 238A. + }
SECTION 9. { + (1) A member of the individual account program
who established membership in the system on or after the
effective date of this 2011 Act, as described in section 2 of
this 2011 Act, may make employee contributions to the program
equal to a specific percentage of the member's salary. The
percentage may not be more than 10 percent, or more than the
percentage allowed by the federal law governing the program's tax
qualification. The percentage must be a whole number.
(2) A participating public employer may not assume or pay the
employee contribution provided for in this section.
(3) Employee contributions made by a member of the individual
account program under this section shall be credited by the board
to the employee account established for the member under ORS
238A.350 (2). + }
SECTION 10. ORS 238A.335 is amended to read:
238A.335. (1) A participating public employer may agree, by a
written employment policy or by a collective bargaining
agreement, to pay the employee contribution required under ORS
238A.330. The policy or agreement need not include all members of
the individual account program employed by the employer.
(2) An agreement under this section to pay the required
employee contribution may provide that:
(a) Employee compensation be reduced to generate the funds
needed to make the employee contributions; or
(b) Additional amounts be paid by the employer for the purpose
of making the employee contributions, and employee compensation
not be reduced for the purpose of generating the funds needed to
make the employee contributions.
(3) A participating public employer must give written notice to
the Public Employees Retirement Board at the time that a written
employment policy or collective bargaining agreement described in
subsection (1) of this section is adopted or changed. The notice
must specifically indicate whether the agreement is as described
in subsection (2)(a) or (b) of this section. Any change in the
manner in which employee contributions are to be paid applies
only to employee contributions made on and after the date the
notice is received by the board.
{ + (4) The provisions of this section apply only to employee
contributions for a member who establishes membership in the
system before the effective date of this 2011 Act, as described
in section 2 of this 2011 Act. + }
SECTION 11. ORS 238A.340 is amended to read:
238A.340. (1) A participating public employer may agree, by a
written employment policy or agreement, to make employer
contributions for members of the individual account program
employed by the employer. The percentage of salary paid as
employer contributions may not be less than one percent of salary
or more than six percent of salary, and must be a whole number. A
participating public employer may make an agreement under this
section for specific groups of employees employed by the public
employer.
(2) If a participating public employer makes employer
contributions under this section and the member for which the
contributions are made fails to vest in the employer account
under the provisions of ORS 238A.320, the Public Employees
Retirement Board shall apply the contributions in the employer
account against other obligations of the employer under the
Oregon Public Service Retirement Plan.
{ + (3) The provisions of this section apply only to employer
contributions for a member who establishes membership in the
system before the effective date of this 2011 Act, as described
in section 2 of this 2011 Act. + }
SECTION 12. { + Section 13 of this 2011 Act is added to and
made a part of ORS chapter 238A. + }
SECTION 13. { + (1) The provisions of this section apply to a
member who establishes membership in the system on or after the
effective date of this 2011 Act, as described in section 2 of
this 2011 Act.
(2) A participating public employer must contribute to the
individual account program an amount equal to one percent of a
member's salary for every one percent of salary contributed by
the member under section 9 of this 2011 Act. In no event may the
total contribution by the employer for a member exceed an amount
equal to 10 percent of the member's salary. + }
SECTION 14. ORS 238A.350 is amended to read:
238A.350. (1) Upon any contributions being made to the
individual account program by or on behalf of a member of the
program, the Public Employees Retirement Board shall create the
account or accounts described in this section. Each account shall
be adjusted at least annually in accordance with rules adopted by
the board to reflect any net earnings or losses on those
contributions and to pay the reasonable administrative costs of
maintaining the program to the extent the earnings on the assets
of the program are insufficient to pay those costs. The
adjustments described in this subsection shall continue until the
account is distributed to the member or forfeited.
(2) The board shall establish an employee account, which shall
consist of the employee contributions made by or on behalf of the
member as adjusted under subsection (1) of this section.
(3) If the public employer agrees to make employer
contributions under ORS 238A.340, { + or is required to make
employer contributions under section 13 of this 2011 Act, + } the
board shall establish an employer account, which shall consist of
the employer contributions made on behalf of the member as
adjusted under subsection (1) of this section.
(4) If the board accepts rollover contributions on behalf of
the member, the board shall establish a rollover account, which
shall consist of the rollover contributions made by the member as
adjusted under subsection (1) of this section. Contributions and
the earnings attributable to the contributions must be accounted
for separately.
(5) The board shall provide an annual statement to each active
and inactive member of the program that reflects the amount
credited to the accounts established under this section. The
statement shall reflect whether the member is vested in the
employer account under the provisions of ORS 238A.320.
SECTION 15. ORS 238A.375 is amended to read:
238A.375. (1) An inactive member of the individual account
program may elect to receive a distribution of the amounts in the
member's employee account, rollover account and employer account
to the extent the member is vested in those accounts under ORS
238A.320 { + or section 6 of this 2011 Act + } if the inactive
member has separated from all service with participating public
employers and with employers who are treated as part of a
participating public employer's controlled group under the
federal laws and rules governing the status of the system and the
fund as a qualified governmental retirement plan and trust.
(2) If an inactive member of the individual account program who
is not vested in the employer account receives a distribution
under subsection (1) of this section, the employer account of the
member is permanently forfeited as of the date of the
distribution.
(3) A member may not make an election under this section for
less than all of the member's individual accounts described in
ORS 238A.350 in which the member is vested.
(4) A member who is vested in the pension program established
under this chapter and who is eligible to withdraw from the
pension program under ORS 238A.120 may make an election under
this section only if the member also withdraws from the pension
program. A member who has a member account established under ORS
chapter 238 may make an election under this section only if the
member also withdraws that member account in the manner provided
by ORS 238.265. A member who has an account established under ORS
238.440 may make an election under this section only if the
member also withdraws the account established under ORS 238.440.
(5) If an inactive member receives a distribution under
subsection (1) of this section and is subsequently reemployed by
a participating public employer, any service performed before the
date the member became an inactive member may not be used toward
the period of service required for vesting in the employer
account under ORS 238A.320.
SECTION 16. ORS 238A.400, as amended by section 7, chapter 82,
Oregon Laws 2010, is amended to read:
238A.400. (1) Upon retirement on or after the earliest
retirement date, as described in ORS 238A.165, a member of the
individual account program shall receive in a lump sum the
amounts in the member's employee account, rollover account and
employer account to the extent the member is vested in those
accounts under ORS 238A.320 { + or section 6 of this 2011
Act + }.
(2) In lieu of a lump sum payment under subsection (1) of this
section, a member of the individual account program may elect to
receive the amounts in the member's employee account and employer
account, to the extent the member is vested in those accounts
under ORS 238A.320 { + or section 6 of this 2011 Act + }, in
substantially equal installments paid over a period of 5, 10, 15
or 20 years, or over a period that is equal to the anticipated
life span of the member as actuarially determined by the Public
Employees Retirement Board. Installments may be made on a
monthly, quarterly or annual basis. In no event may the period
selected by the member exceed the time allowed by the minimum
distribution requirements described in subsection (5) of this
section. The board shall by rule establish the manner in which
installments will be adjusted to reflect investment gains and
losses on the unpaid balance during the payout period elected by
the member under this subsection. The board by rule may establish
minimum monthly amounts payable under this subsection. The board
may require that a lump sum payment, or an installment schedule
different than the schedules provided for in this subsection, be
used to pay the vested amounts in the member's accounts if those
amounts are not adequate to generate the minimum monthly amounts
specified by the rule.
(3) A member of the individual account program electing to
receive installments under subsection (2) of this section must
designate a beneficiary or beneficiaries. In the event the member
dies before all amounts in the employee and vested employer
accounts are paid, all remaining installment payments shall be
made to the beneficiary or beneficiaries designated by the
member. A beneficiary may elect to receive a lump sum
distribution of the remaining amounts.
(4) A member who is entitled to receive retirement benefits
under ORS chapter 238 may receive vested amounts in the member's
employee account, rollover account and employer account in the
manner provided by this section when the member retires for
service under the provisions of ORS chapter 238.
(5) Notwithstanding any other provision of ORS 238A.300 to
238A.415, the entire interest of a member of the individual
account program must be distributed over a time period commencing
no later than the latest retirement date set forth in ORS
238A.170, and must be distributed in a manner that satisfies all
other minimum distribution requirements of 26 U.S.C. 401(a)(9)
and regulations implementing that section, as in effect on
December 31, 2009. The board shall adopt rules implementing those
minimum distribution requirements.
SECTION 17. ORS 238A.410, as amended by section 8, chapter 82,
Oregon Laws 2010, is amended to read:
238A.410. (1) If a member of the individual account program
dies before retirement, the amounts in the member's employee
account, rollover account and employer account, to the extent the
member is vested in those accounts under ORS 238A.320 { + or
section 6 of this 2011 Act + }, shall be paid in a lump sum to
the beneficiary or beneficiaries designated by the member for the
purposes of this section.
(2) If a member of the individual account program is married at
the time of death, or there exists at the time of death any other
person who is constitutionally required to be treated in the same
manner as a spouse for the purpose of retirement benefits, the
spouse or other person shall be the beneficiary for purposes of
the death benefit payable under this section unless the spouse or
other person consents to the designation of a different
beneficiary or beneficiaries before the designation has been made
and the consent has not been revoked by the spouse or other
person as of the time of the member's death. Consent and
revocation of consent must be in writing, acknowledged by a
notary public, and submitted to the Public Employees Retirement
Board in accordance with rules adopted by the board. If the
member's spouse is designated as the member's beneficiary and the
marriage of the member and spouse is subsequently dissolved, the
former spouse shall be treated as predeceasing the member for
purposes of this section, unless the member expressly designates
the former spouse as beneficiary after the effective date of the
dissolution or the former spouse is required to be designated as
a beneficiary under the provisions of ORS 238.465.
(3) For purposes of this section and ORS 238A.400 (3), if a
member fails to designate a beneficiary, or if the person or
persons designated do not survive the member, the death benefit
provided for in this section shall be paid to the following
person or persons, in the following order of priority:
(a) The member's surviving spouse or other person who is
constitutionally required to be treated in the same manner as a
spouse;
(b) The member's surviving children, in equal shares; or
(c) The member's estate.
(4) The entire amount of a deceased member's vested accounts
must be distributed by December 31 of the fifth calendar year
after the year in which the member died. Notwithstanding any
other provision of this chapter, distributions of death benefits
under the individual account program must comply with the minimum
distribution requirements of 26 U.S.C. 401(a)(9) and the
regulations implementing that section, as in effect on December
31, 2009. The Public Employees Retirement Board shall adopt rules
implementing those minimum distribution requirements.
SECTION 18. ORS 243.800 is amended to read:
243.800. (1) Notwithstanding any provision of ORS chapter 238
or 238A or ORS 243.910 to 243.945, the State Board of Higher
Education shall establish and administer an Optional Retirement
Plan for administrative and academic employees of the Oregon
University System who are eligible for membership in the Public
Employees Retirement System. The Optional Retirement Plan must be
a qualified plan under the Internal Revenue Code, capable of
accepting funds transferred under subsection (7) of this section
without the transfer being treated as a taxable event under the
Internal Revenue Code, and willing to accept those funds.
Retirement and death benefits shall be provided under the plan by
the purchase of annuity contracts, fixed or variable or a
combination thereof, or by contracts for investments in mutual
funds.
(2) The State Board of Higher Education shall select at least
two life insurance companies providing fixed and variable
annuities and at least two investment companies providing mutual
funds, but not more than five companies in total, for the purpose
of providing benefits under the Optional Retirement Plan. The
State Board of Higher Education shall establish selection
criteria for the purpose of this subsection.
(3) An administrative or academic employee may make an
irrevocable election to participate in the Optional Retirement
Plan within six months after being employed. An election under
this subsection is effective on the first day of the month
following six full months of employment.
(4) An administrative or academic employee who does not elect
to participate in the Optional Retirement Plan:
(a) Remains or becomes a member of the Public Employees
Retirement System in accordance with ORS chapters 238 and 238A;
or
(b) Continues to be assisted by the State Board of Higher
Education under ORS 243.920 if the employee is being so assisted.
(5) Except as provided in subsection (6) of this section,
employees who elect to participate in the Optional Retirement
Plan are ineligible for active membership in the Public Employees
Retirement System or for any assistance by the State Board of
Higher Education under ORS 243.920 as long as those employees are
employed in the Oregon University System and the plan is in
effect.
(6)(a) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, who has creditable
service under ORS chapter 238 as defined by ORS 238.005 and who
is not vested shall be considered by the Public Employees
Retirement Board to be a terminated member under the provisions
of ORS 238.095 as of the effective date of the election, and the
amount credited to the member account of the member shall be
transferred directly to the Optional Retirement Plan by the
Public Employees Retirement Board in the manner provided by
subsection (7) of this section.
(b) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, who has creditable
service under ORS chapter 238 as defined by ORS 238.005 and who
is vested shall be considered to be an inactive member by the
Public Employees Retirement Board and shall retain all the
rights, privileges and options under ORS chapter 238 unless the
employee makes a written request to the Public Employees
Retirement Board for a transfer of the amounts credited to the
member account of the member to the Optional Retirement Plan. A
request for a transfer must be made at the time the member elects
to participate in the Optional Retirement Plan. Upon receiving
the request, the Public Employees Retirement Board shall transfer
all amounts credited to the member account of the member directly
to the Optional Retirement Plan, and shall terminate all rights,
privileges and options of the employee under ORS chapter 238.
(c) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is not a
vested member of the pension program of the Oregon Public Service
Retirement Plan as described in ORS 238A.115 on the date that the
election becomes effective, shall be considered to be a
terminated member of the pension program by the Public Employees
Retirement Board as of the effective date of the election.
(d) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is a vested
member of the pension program of the Oregon Public Service
Retirement Plan as described in ORS 238A.115 on the date that the
election becomes effective, shall be considered an inactive
member of the pension program by the Public Employees Retirement
Board as of the effective date of the election. An employee who
is subject to the provisions of this paragraph retains all the
rights, privileges and options of an inactive member of the
pension program. If the actuarial equivalent of the employee's
benefit under the pension program at the time that the election
becomes effective is $5,000 or less, the employee may make a
written request to the Public Employees Retirement Board for a
transfer of the employee's interest under the pension program to
the Optional Retirement Plan. The request must be made at the
time the member elects to participate in the Optional Retirement
Plan. Upon receiving the request, the Public Employees Retirement
Board shall transfer the amount determined to be the actuarial
equivalent of the employee's benefit under the pension program
directly to the Optional Retirement Plan, and shall terminate the
membership of the employee in the pension program.
(e) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is a vested
member of the individual account program of the Oregon Public
Service Retirement Plan as described in ORS 238A.320 { + or
section 6 of this 2011 Act + } on the date that the election
becomes effective, shall be considered an inactive member of the
individual account program by the Public Employees Retirement
Board as of the effective date of the election. An employee who
is subject to the provisions of this paragraph retains all the
rights, privileges and options of an inactive member of the
individual account program. An administrative or academic
employee who elects to participate in the Optional Retirement
Plan, and who is a member of the individual account program of
the Oregon Public Service Retirement Plan, may make a written
request to the Public Employees Retirement Board that all amounts
in the member's employee account, rollover account and employer
account, to the extent the member is vested in those accounts
under ORS 238A.320 { + or section 6 of this 2011 Act + }, be
transferred to the Optional Retirement Plan. The request must be
made at the time the member elects to participate in the Optional
Retirement Plan. Upon receiving the request, the Public Employees
Retirement Board shall transfer the amounts directly to the
Optional Retirement Plan, and shall terminate the membership of
the employee in the individual account program upon making the
transfer.
(f) Notwithstanding paragraphs (b), (d) and (e) of this
subsection, the Public Employees Retirement Board may not treat
any employee as an inactive member under the provisions of this
subsection for the purpose of receiving any benefit under ORS
chapter 238 or 238A that requires that the employee be separated
from all service with participating public employers and with
employers who are treated as part of a participating public
employer's controlled group under the federal laws and rules
governing the status of the system and the Public Employees
Retirement Fund as a qualified governmental retirement plan and
trust.
(7) Any amounts transferred from the Public Employees
Retirement Fund under subsection (6) of this section shall be
transferred directly to the Optional Retirement Plan by the
Public Employees Retirement Board and may not be made available
to the employee.
(8) An employee participating in the Optional Retirement Plan
shall contribute monthly an amount equal to the percentage of the
employee's salary that the employee would otherwise have
contributed as an employee contribution to the Public Employees
Retirement System if the employee had not elected to participate
in the Optional Retirement Plan.
(9) The State Board of Higher Education shall contribute
monthly to the Optional Retirement Plan the percentage of salary
of each employee participating in the plan equal to the
percentage of salary that would otherwise have been contributed
as an employer contribution on behalf of the employee to the
Public Employees Retirement System, before any offset under ORS
238.229 (2), if the employee had not elected to participate in
the Optional Retirement Plan.
(10) Both employee and employer contributions to an Optional
Retirement Plan shall be remitted directly to the companies that
have issued annuity contracts to the participating employees or
directly to the mutual funds.
(11) Benefits under the Optional Retirement Plan are payable to
employees who elect to participate in the plan and their
beneficiaries by the selected annuity provider or mutual fund in
accordance with the terms of the annuity contracts or the terms
of the contract with the mutual fund. Employees electing to
participate in the plan agree that benefits payable under the
plan are not obligations of the State of Oregon or of the Public
Employees Retirement System.
SECTION 19. ORS 341.551 is amended to read:
341.551. (1) Notwithstanding any provision of ORS chapter 238
or 238A, the Department of Community Colleges and Workforce
Development may establish and administer an optional retirement
plan for administrative employees of community college districts
who are eligible for membership in the Public Employees
Retirement System. Any community college district may participate
in the plan by giving written notice to the department.
(2) An administrative employee may make an election to
participate in the optional retirement plan if the community
college district that employs the employee is participating in
the plan. The election must be made in the following manner:
(a) An administrative employee who is an active member of the
Public Employees Retirement System may make an election to
participate in the plan within 180 days after the community
college district commences participation in the plan, effective
on the first day of the month following the election.
(b) An administrative employee who is hired after the community
college district commences participation in the plan may make an
election to participate in the plan within the first six months
of employment, effective on the first day of the month following
six full months of employment.
(3) An administrative employee who does not elect to
participate in the optional retirement plan remains or becomes a
member of the Public Employees Retirement System in accordance
with ORS chapters 238 and 238A.
(4) An administrative employee may elect to participate in the
optional retirement plan only if at the time the election becomes
effective the employee is not concurrently employed in a position
with any participating public employer other than the community
college district in a position that entitles the employee to
membership in the Public Employees Retirement System. Except as
provided in subsection (9) of this section, employees who elect
to participate in the optional retirement plan are ineligible for
active membership in the Public Employees Retirement System for
as long as those employees are employed by a community college
district that participates in the plan, whether by reason of
employment by the district or any other participating public
employer.
(5)(a) An administrative employee who elects to participate in
the optional retirement plan, who has creditable service under
ORS chapter 238 as defined by ORS 238.005 and who is not vested
shall be considered by the Public Employees Retirement Board to
be a terminated member under the provisions of ORS 238.095 as of
the effective date of the election, and the amount credited to
the member account of the member shall be transferred directly to
the optional retirement plan by the Public Employees Retirement
Board in the manner provided by subsection (6) of this section.
(b) An administrative employee who elects to participate in the
optional retirement plan, who has creditable service under ORS
chapter 238 as defined by ORS 238.005 and who is vested shall be
considered to be an inactive member by the Public Employees
Retirement Board and shall retain all the rights, privileges and
options under ORS chapter 238 unless the employee makes a written
request to the Public Employees Retirement Board for a transfer
of the amounts credited to the member account of the member to
the optional retirement plan. A request for a transfer must be
made at the time the member elects to participate in the optional
retirement plan. Upon receiving the request, the Public Employees
Retirement Board shall transfer all amounts credited to the
member account of the member directly to the optional retirement
plan and shall terminate all rights, privileges and options of
the employee under ORS chapter 238.
(c) An administrative employee who elects to participate in the
optional retirement plan and who is not a vested member of the
pension program of the Oregon Public Service Retirement Plan as
described in ORS 238A.115 on the date that the election becomes
effective shall be considered to be a terminated member of the
pension program by the Public Employees Retirement Board as of
the effective date of the election.
(d) An administrative employee who elects to participate in the
optional retirement plan and who is a vested member of the
pension program of the Oregon Public Service Retirement Plan as
described in ORS 238A.115 on the date that the election becomes
effective shall be considered an inactive member of the pension
program by the Public Employees Retirement Board as of the
effective date of the election. An employee who is subject to the
provisions of this paragraph retains all the rights, privileges
and options of an inactive member of the pension program. If the
actuarial equivalent of the employee's benefit under the pension
program at the time that the election becomes effective is $5,000
or less, the employee may make a written request to the Public
Employees Retirement Board for a transfer of the employee's
interest under the pension program to the optional retirement
plan. The request must be made at the time the member elects to
participate in the optional retirement plan. Upon receiving the
request, the Public Employees Retirement Board shall transfer the
amount determined to be the actuarial equivalent of the
employee's benefit under the pension program directly to the
optional retirement plan and shall terminate the membership of
the employee in the pension program.
(e) An administrative employee who elects to participate in the
optional retirement plan and who is a vested member of the
individual account program of the Oregon Public Service
Retirement Plan as described in ORS 238A.320 { + or section 6 of
this 2011 Act + } on the date that the election becomes effective
shall be considered an inactive member of the individual account
program by the Public Employees Retirement Board as of the
effective date of the election. An employee who is subject to the
provisions of this paragraph retains all the rights, privileges
and options of an inactive member of the individual account
program. An administrative employee who elects to participate in
the optional retirement plan and who is a member of the
individual account program of the Oregon Public Service
Retirement Plan may make a written request to the Public
Employees Retirement Board that all amounts in the member's
employee account, rollover account and employer account, to the
extent the member is vested in those accounts under ORS
238A.320 { + or section 6 of this 2011 Act + }, be transferred
to the optional retirement plan. The request must be made at the
time the member elects to participate in the optional retirement
plan. Upon receiving the request, the Public Employees Retirement
Board shall transfer the amounts directly to the optional
retirement plan and shall terminate the membership of the
employee in the individual account program.
(f) Notwithstanding paragraphs (b), (d) and (e) of this
subsection, the Public Employees Retirement Board shall not treat
any employee as an inactive member under the provisions of this
subsection for the purpose of receiving any benefit under ORS
chapter 238 or 238A that requires that the employee be separated
from all service with participating public employers and with
employers who are treated as part of a participating public
employer's controlled group under the federal laws and rules
governing the status of the Public Employees Retirement System
and the Public Employees Retirement Fund as a qualified
governmental retirement plan and trust.
(6) Any amounts transferred from the Public Employees
Retirement Fund under subsection (5) of this section shall be
transferred directly to the optional retirement plan by the
Public Employees Retirement Board and shall not be made available
to the employee.
(7) An employee participating in the optional retirement plan
shall contribute monthly an amount equal to the percentage of the
employee's salary that the employee would otherwise have
contributed as an employee contribution to the Public Employees
Retirement System if the employee had not elected to participate
in the optional retirement plan.
(8) A participating community college district shall contribute
monthly to the optional retirement plan the percentage of salary
for each employee participating in the plan that is equal to the
percentage of salary that is required to be made as the employer
contribution under ORS 238A.220, less any contributions made by
reason of unfunded liabilities. The district may make
contributions under this subsection only during periods of time
in which the employee would be eligible for membership in the
Public Employees Retirement System if the employee had not
elected to participate in the optional retirement plan.
(9) An administrative employee who elects to participate in the
optional retirement plan may make an election to withdraw from
the plan. An employee may make an election under this subsection
only once. Upon withdrawing from the plan:
(a) All contributions made to the plan before the effective
date of the withdrawal remain credited to the employee;
(b) The employee becomes a member of the Public Employees
Retirement System under ORS chapter 238A if the member meets all
requirements for membership under ORS chapter 238A; and
(c) The employee is barred from ever again electing to
participate in the optional retirement plan.
(10) For the purposes of this section, 'administrative
employee' means a president, vice president or dean, or a person
holding a position that is the equivalent of a president, vice
president or dean.
SECTION 20. { + This 2011 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2011 Act takes effect on
its passage. + }
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